The Mint Report for 12 October 2011

The Mint Report for 12 October 2011

Infosys has kicked off the earnings season for India’s IT industry on a promising note. The company reported robust growth all around in the second quarter and issued a guidance that was better than some had feared. Profit in the three months to September grew 10.8% sequentially to Rs1,906 crore. And revenue gained 8.2% to Rs8,099 crore. Margins also went up by 1.9% to 28.16%.

Meanwhile the Infosys guidance for the fiscal year was cut down, but didn’t alarm investors. The dollar revenue growth forecast was brought down to a range of 17.1 to 19.1%. The earlier forecast was for 18-20% growth.

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The reduction could be the result of clients decreasing their discretionary spending. But Infosys has cited currency fluctuations. Shares of the company jumped up 6.83% on the BSE to 2680.50 on a day the Sensex climbed 2.55%.

Switching to the economy, new figures show India’s industrial output has been stuck at low levels for a second month in a row. The index of industrial production grew just 4.1% in August. The revised figure for July is 3.8%. Finance minister Pranab Mukherjee said the latest numbers were disappointing and could affect GDP growth this year.

The industrial output figures for August also differ from July’s in one key respect—the sluggish growth appears to be across sectors. Manufacturing growth in August was just 4.5%. And capital goods grew 3.9%. One sector that saw strong growth was electricity generation, with a figure of 9.5%.